McCreath: Alberta Premier Notley 'made the best out of a bad situation' for the struggling oil industry
Consumer confidence is down across Canada, but nowhere like Alberta.
Polling by Nanos Research conducted for Bloomberg News shows household sentiment in the western province recorded its second-lowest reading in weekly surveys going back to early 2013. That makes Alberta’s households -- still the richest in the country -- easily the least hopeful amid a crisis in its oil patch that has seen prices for Canadian heavy-crude drop to record lows.
The deterioration in sentiment in the oil-producing province also suggests Prime Minister Justin Trudeau’s budget update two weeks ago -- which included tax cuts for business investment, but had nothing specific for the industry -- did little to assuage those concerns. On Sunday, Alberta Premier Rachel Notley ordered an unprecedented output cut to ease the crisis.
Global oil prices crashed last month by the most in more than a decade, a plunge that hit producers in Alberta particularly hard amid surging oil-sands output, a shortage of pipeline space and heavy U.S. refinery maintenance.
This crisis came with the province still not fully recovered from the oil price collapse of four years ago. The jobless rate in Alberta is still above what it was in 2014, even as it hovers at the lowest in decades nationally, the provincial economy has shrunk over the past three years, and business confidence remains subdued.
However, the polling also shows Albertans aren’t alone in their angst.
A recent spate of worrying news outside of the oil industry, including volatility in global financial markets and the planned shutdown of General Motors Co.’s plant in Oshawa, east of Toronto, is fueling anxiety in other parts of the country. The polling recorded one of the sharpest nationwide declines in household sentiment in the survey’s five-year history over the past four weeks, particularly in Ontario.
Every week, Nanos Research asks 250 Canadians for their views on personal finances, job security, the outlook for the economy and where real estate prices are headed. Bloomberg publishes four-week rolling averages of the 1,000 telephone responses. A composite indicator -- the Bloomberg Nanos Canadian Confidence Index -- is also calculated from the rolling averages of the four questions.
The overall index dropped to 53.6 last week, the lowest reading since March 2016. It had touched a five-month high in October.
- A composite gauge for the three prairie provinces -- Alberta, Saskatchewan and Manitoba -- fell to 41.5 last week. It’s only been lower once since March 2013, when weekly surveying began
- Ontario’s reading is 55.9, down from as high as 60 last month. Quebeckers are the most optimistic about their economic prospects, with sentiment gauges in that province largely stable over the past month
- Nationally, the percentage who anticipate the economy will strengthen fell to 13.5 per cent, the lowest since September
- The share of Canadians who say their finances are better off over the past year fell to 15.9 per cent last week, the lowest reading since March 2017
- Only 34.2 per cent of Canadians expect the value of real estate in their neighborhood to increase over the next six months, the lowest reading since March 2016
- Job security levels have held up a bit better, but have also shown slight signs of weakening over the past month